More Consumers Will Hold Onto Those Tax Refunds

February 19, 2014

More Americans this year are expected to put their tax returns in the bank.  According to the National Retail Federation's Tax Returns Survey conducted by Prosper Insights & Analytics, 46% of those expecting a refund this year will put their money into savings, up from 44% last year and the highest percent in the survey's history.

Two-thirds (66.6%) of those surveyed are expecting a refund this year.  As for other ways consumers will use their refunds, 37.7% will pay down debt, and one-quarter (25.3%) will use it toward everyday expenses.  One in ten (10.7%) will treat themselves and invest in a major purchase, and 12.8% will spend their refunds on a vacation.

Young adults between 18 and 24 are most likely to save their tax returns, with nearly six in ten (57.7%) planning to contribute to their savings accounts, higher than any other age group.  They are also the most likely to use their refunds for everyday expenses (34%) and to purchase a big ticket item such as a new television or piece of furniture (18.3%).  Three in ten (30.2%) will use their checks to pay down debt, second to last behind those 65 and older (27%).

"Financial security is top of mind for all Americans, and refunds can play a huge role in helping achieve that," said NRF president and CEO Matthew Shay.  "Whether consumers use a refund to pay down debt, bulk up their savings, or buy that big ticket item they've been saving for, a check from Uncle Sam, large or small, goes a long way these days."

Source: Retailing Today